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Searches for a China WFOE still use the name of a form that no longer exists in law. WFOE stands for wholly foreign-owned enterprise, the vehicle created by the Wholly Foreign-Owned Enterprise Law. The Foreign Investment Law repealed that statute, together with the two joint venture laws, when it took effect on 1 January 2020, and gave older enterprises five years to keep their original form. The Ministry of Commerce (MOFCOM) now states that foreign-invested enterprises formed since 2020 are no longer divided into equity joint ventures, cooperative joint ventures and wholly foreign-owned enterprises.
What a foreign founder registers today is an ordinary company under the Company Law, most often a limited liability company (LLC), which counts as a foreign-invested enterprise (FIE) because a foreigner holds it. Company registration in China is done by the local market regulation administration (AMR) under the State Administration for Market Regulation (SAMR), and the registered details are published on the National Enterprise Credit Information Publicity System at gsxt.gov.cn. This page covers mainland China. Hong Kong has its own company law and registry, described on our Hong Kong company formation page.
| Vehicle | What the law allows | Point to watch |
|---|---|---|
| Limited liability company | One to fifty shareholders; a single foreign individual or foreign company may own it | Subscribed capital must be paid within five years of establishment |
| Joint stock limited company | One to two hundred promoters | More than half of the promoters must be domiciled in China; shares are paid in full before establishment |
| Foreign-invested partnership | Available under the Partnership Enterprise Law | Not allowed in any field where the Negative List sets an equity requirement |
| Branch of a foreign company | Carries on business in China for the foreign company, which answers for its debts | Needs prior approval, a representative in China and allocated funds; no Chinese legal personality |
| Representative office | Market research, exhibitions, publicity and liaison for the parent | No legal personality and no profit-making activity |
Individual businesses, sole proprietorship enterprises and farmers’ cooperatives are closed to foreigners. For a founder who wants to invoice customers, employ staff and remit profit, the LLC is the answer, and the rest of this page follows it.
Some groups put a Hong Kong company between themselves and the mainland LLC. The mainland withholding rate on dividends paid to a Hong Kong company that beneficially owns at least 25% of the paying company is 5%, against the general 10%. Where that layer is what you need, start with our Hong Kong company guide.
The Foreign Investment Law applies pre-establishment national treatment plus a negative list (Article 4). Outside the list, a foreign investor forms and runs a company on the same terms as a Chinese one. Inside it, the investor either meets the listed condition or stays out (Article 28). The edition in force is the Special Administrative Measures (Negative List) for Foreign Investment Access, 2024 Edition, with 29 items, which replaced the 2021 edition on 1 November 2024 and contains no manufacturing item.
Value-added telecoms services are capped at 50% foreign ownership, with e-commerce, domestic multi-party communications, store-and-forward and call centres excepted; market research and medical institutions are open only as joint ventures; and news, publishing, broadcasting, film, compulsory education, Chinese legal services, social surveys, postal services and tobacco wholesale and retail are prohibited. A separate Market Access Negative List, whose 2025 edition has 106 items, applies to Chinese and foreign investors alike, and pilot free trade zones may apply more favourable measures to qualifying investors.
The registration authority refuses to register a company whose foreign investment does not comply with the list, and investment that may affect national security is subject to a security review whose decision is final. A Chinese individual holding the shares on paper does not change any of this: the law counts indirect investment as foreign investment, and the Supreme People’s Court treats an investment contract in a prohibited field as invalid.
| Step | What happens | Basis |
|---|---|---|
| 1. Scope check | The intended business scope is compared with both negative lists; any scope item that needs a licence needs it before it can be practised | Foreign Investment Law; Company Law, Article 9 |
| 2. Company name | Self-declared through the market regulation name system | MOFCOM Foreign Investment Guide |
| 3. Documents | Application form, identity or qualification documents of each investor, proof of the domicile, articles of association | Market Entity Registration Regulations, Article 16 |
| 4. Identity check | Registration is real-name: applicants and other persons named are verified | Article 15 |
| 5. Filing | At the AMR service window or through the online enterprise registration system, with directors, supervisors, senior managers, beneficial owners and, for an FIE, a recipient of legal documents | Articles 8 and 9 |
| 6. Decision | A complete file is registered on the spot; otherwise within three working days, which the head of the authority may extend by three for a complex case | Article 19 |
| 7. Business licence | Its issue date is the date of establishment; an electronic licence counts the same as paper | Articles 21 and 22 |
| 8. Initial report | The foreign investment initial report reaches MOFCOM through the same registration system | Foreign Investment Law, Article 34 |
Documents issued abroad follow the Apostille Convention, in force for China since 7 November 2023, so papers from another contracting state carry an apostille instead of consular legalisation. Expect to file them with a Chinese translation: Beijing’s market regulator, for example, asks for a translation stamped by a translation company and verifies the people involved by face recognition through its real-name system.
The licence opens a second round. MOFCOM’s procedure chart lists the official seal from the public security bureau, invoices from the tax department, social insurance registration, foreign exchange registration and the bank account. Tax registration happens together with the licence, and the company confirms its tax details when its first tax obligation arises.
There is no general minimum capital for an LLC in China. Under Article 47 of the Company Law, as revised in December 2023 and in force since 1 July 2024, the registered capital is whatever the shareholders subscribe, and they must pay it in full within five years of the date of establishment. A law, administrative regulation or State Council decision may set a paid-in rule, a minimum or a different period for particular sectors, and those rules prevail. Capital can be money, paid into the company’s own bank account, or assets such as intellectual property, land use rights or equity that can be valued and transferred.
The deadline has teeth. The board must check contributions and send a written call to any shareholder who is late, and directors who fail to do so answer for the loss; after a grace period of at least 60 days the board may forfeit the unpaid equity; and creditors of a company that cannot pay its debts may demand early payment. Subscribed and paid amounts, and every change to them, are published on gsxt within 20 working days. Companies registered before July 2024 with longer periods must bring the remaining period within five years by 30 June 2027. The practical rule is to subscribe an amount the business will actually need and can pay.
A small LLC may replace the board with a single director, who may also act as manager, and every director serves terms of at most three years. The director or manager who executes the company’s affairs is its legal representative, named on the licence; if that person resigns, the company appoints a successor within 30 days. Supervision can sit with a board of supervisors, an audit committee of directors or, in a small company, one supervisor, or none if every shareholder agrees.
The Company Law sets no nationality or residence rule for these posts, so a foreign owner may hold all of them. Exceptions come from the Negative List, which requires a Chinese national as legal representative of an airline and as head of certain schools. Residence becomes a question once someone will work in China: the Exit and Entry Administration Law requires a work permit and a work-type residence permit, and forbids employing a foreigner without them. A sole shareholder who cannot prove the company’s assets are separate from its own is jointly liable for its debts.
| Obligation | What the rules require |
|---|---|
| Corporate income tax | 25%; a small low-profit enterprise with taxable income up to RMB 3 million, no more than 300 employees and assets up to RMB 50 million pays an effective 5% until 31 December 2027 |
| Hainan and other zones | Encouraged enterprises with operational substance in the Hainan Free Trade Port pay 15% until 31 December 2027; similar rates apply in the Western Regions, Qianhai and Hengqin |
| Provisional tax returns | Within 15 days after each month or quarter |
| Annual tax return | Within five months after the calendar year, with an audit certificate from a registered public accountant |
| VAT status | Small-scale taxpayer up to RMB 5 million of annual sales; general taxpayer registration is compulsory above that and cannot be reversed |
| Annual report | Between 1 January and 30 June through gsxt, including the foreign investment annual report from the second year |
| Beneficial owners | Filed at registration; any change filed within 30 days |
Missing the annual report window puts the company on the list of enterprises with abnormal operations, which anyone can see on gsxt. Rates for VAT, withholding and dividends are summarised on our China company guide.
Rarely for speed: the AMR registers a complete file on the spot or within three working days, and a foreign buyer passes the same Negative List check and reporting as a founder. An existing company is worth considering when its registered scope, domicile, tax record or banking matter to you, and it brings duties of its own, such as subscribed capital still unpaid. The purchase route and its checks are set out on ready-made shelf companies in China, and the idea in general in our guide to off-the-shelf companies.
We can form a new mainland company or supply an existing one, prepare the formation or transfer documents and the registration filings, and help put together the bank application. Where we have a working contact at a suitable bank, we can introduce you, and the bank alone decides. How banks treat new foreign-invested companies is covered on bank accounts for China companies.
Check your business scope against the 2024 Negative List and the Market Access Negative List, then choose the vehicle, usually an LLC. Self-declare the name, prepare the articles and the investor documents, apostilled where the issuing country is a party to the Convention, and file with the local AMR at its window or online. After the licence come the seal, tax and invoice set-up, foreign exchange registration and the bank account.
For the AMR step the Market Entity Registration Regulations set the pace: a complete application is registered on the spot, or within three working days if that is not possible, with a further three working days for a complex case. The rules set no single period for the steps that follow, such as the seal, the bank account and licences for regulated activities.
Not as a general rule. The Company Law lets shareholders of an LLC choose the registered capital, with no statutory floor, unless a law, administrative regulation or State Council decision sets a minimum or paid-in rule for a particular sector. Whatever is subscribed is published on gsxt and must be paid within five years, so a realistic figure is safer than a large one.
Within five years of the date of establishment for an LLC (Company Law, Article 47), as the articles schedule it. A shareholder who misses a payment date receives a written call, gets at least 60 days’ grace and may then lose the unpaid equity. Companies formed before 1 July 2024 must shorten any longer remaining period to five years by 30 June 2027.
Yes, in every field not on the foreign investment Negative List, which in its 2024 edition has only 29 items and no manufacturing item. Sectors such as value-added telecoms, market research and medical institutions carry caps or joint venture requirements, and others such as news media and compulsory education are closed. One foreign individual or company may be the sole shareholder of an LLC.
No, not under the Company Law, which sets no nationality or residence condition for directors, supervisors or the legal representative of an LLC. A few sectors on the Negative List require a Chinese national in a named role. Anyone who will actually work in China needs a work permit and a work-type residence permit, and the legal representative must meet the registration rules on disqualification.
Planning a foreign-invested company in China? Send us the business scope, the city and the shareholders you have in mind, and we will tell you whether the scope sits on the Negative List and what the registration file would need. Telegram and WhatsApp reach us at +48 663 247 166.